The iPhone X is the most expensive phone Apple has ever made, which could be bad news for retailers during the all-important holiday season.

The high price of the new iPhone, coupled with increased demand in a "supercycle" of upgrades could mean holiday shoppers have less money than usual to spend on other categories, such as clothing.

"Apparel is a wallet share donor to other categories, with cell phones/technology and services being two of them," according to a Morgan Stanley note to clients. "We see this upgrade supercycle coupled with the very high $999 iPhone X average selling price as a significant headwind to Specialty Retailers and Department stores in the fourth quarter."

Morgan Stanley's Apple analyst Katy Huberty is predicting a "supercycle" of customers upgrading to the iPhone X due to its new form factor, increased battery life, and augmented reality features. The last time an iPhone user could upgrade to a phone as distinctively different from existing devices as the new model was when Apple released the iPhone 6 in 2014. Since then, Apple has largely maintained the same basic designs in its yearly updates, limiting the upgrade appeal for some.

The iPhone X doesn't seem to have that problem, as preorders sold out in just minutes. Huberty is expecting sales of the iPhone X to "absorb" $30 billion of discretionary spending during the fourth-quarter holiday season. That could deter spending in other categories. Huberty suggested that the large price tag of the new phone is likely to leave consumers thinking "'I just bought a $1000 phone last month, I don't really need another pair of jeans.'"

In total, the three new iPhone models will take about $52.6 billion of spending away from other categories, Huberty predicts.

The pain Huberty expects retailers to feel likely won't end after the holiday season either. The iPhone X is expected to be available in limited quantities for a few months, which means consumers might be forced to wait to buy a new phone until early next year. That would not only shift spending during the holiday season, but could also detract from retailers' sales in the first half of 2018 as well.

Apple is up 43.72% this year, and was trading at about $166.86 Wednesday morning.